EU Removes Last Major Obstacle To Brexit Deal In pre-Summit Talks

by Samuel Abasi Posted on November 25th, 2018

Brussels, Belgium : The European Union removed the last major obstacle to sealing an agreement on Brexit after Spain said it had reached a deal Saturday with Britain over Gibraltar on the eve of a summit where EU leaders will sign off on the divorce papers. The European Council president, Donald Tusk, recommended Saturday the EU approve the deal.

British Prime Minister Theresa May was in Brussels on Saturday for last-minute talks with European Commission President Jean-Claude Juncker and European Council President Donald Tusk on the eve of an EU summit threatened by Spanish objections to her deal on Britain’s withdrawal from the bloc.

Spain wants the future of the tiny territory, which was ceded to Britain in 1713 but is still claimed by Spain, to be a bilateral issue between Madrid and London, not between Britain and the EU.

Spain had threatened to veto the deal unless the wording was changed to give Madrid guarantees that it alone can decide on the future of the disputed territory of Gibraltar in direct talks with London.

However, an agreement reached on Saturday between Spain, the EU and Britain removed obstacles to the summit, both sides said.

Spanish Prime Minister Pedro Sanchez, who had threatened to oppose the deal, announced Saturday that Madrid would support the divorce agreement after the U.K. and the EU underscored Spain’s say in the future of the disputed British territory of Gibraltar, which lies at the southern tip of the Mediterranean nation.

Spain wants the future of the tiny territory, which was ceded to Britain in 1713 but is still claimed by Spain, to be a bilateral issue between Madrid and London, not between Britain and the EU.

Spain claimed a major diplomatic victory.

“Europe and the United Kingdom have accepted the conditions imposed by Spain,” Sanchez said. “Therefore, as a consequence of this, Spain will lift its veto and tomorrow will vote in favor of Brexit.”

“We have reached an agreement on Gibraltar,” said Spanish Prime Minister Pedro Sanchez in a statement. Any future decisions about Gibraltar would be taken only with Spain’s consent, he said.

EC spokesman Margaritis Schinas confirmed that after a constructive meeting between Juncker and May, EU leaders were “on track for tomorrow” and the key summit.

But Britain said the statement merely clarified the existing state of affairs. May said Britain had conceded nothing on the sovereignty of Gibraltar.

“I will always stand by Gibraltar,” May said. “The U.K. position on the sovereignty of Gibraltar has not changed and will not change.”

The move should allow EU leaders speedily to sign off on the Brexit agreement at a special summit Sunday morning.

May hopes to leave Brussels on Sunday with the terms of British withdrawal on March 29 and a comprehensive concept for future Britain-EU relations settled with the bloc.

In an open letter to the UK people, she said she would campaign vigorously for British lawmakers to vote in favor of the main withdrawal agreement when it comes before Parliament.

“It will be a deal that is in our national interest — one that works for our whole country and all of our people, whether you voted ‘Leave’ or “Remain,'” she said late Saturday.

The British premier, however, is still facing significant opposition to the deal. The Democratic Union Party (DUP) of Northern Ireland, whose support is vital to her government, has said the deal would leave Britain in a “pitiful and pathetic place.”

The right-wing, “Christian fundamentalist” DUP, which is in favor of British rule in Northern Ireland, believes the deal’s backstop provision to ensure an open border on the island of Ireland will give the province a different economic status compared with the mainland.

DUP leader Arlene Foster told delegates at a party conference on Saturday that the backstop must be removed, otherwise the party will vote against the withdrawal agreement if it is brought before Parliament.

The DUP fears the measure could increase the chances of Irish unification, which it vigorously rejects.

Getting the DUP on board will be highly important to May if the deal is to be passed by Parliament, where May’s Conservative Party only has a minority. The Conservatives have a “confidence-and-supply” arrangement with the DUP’s 10 members of Parliament, allowing them an effective majority.

Britain’s finance minister, Philip Hammond, reiterated his support for May’s draft deal on Saturday, telling broadcaster BBC that it was “a way of Britain leaving the European Union … with minimum negative impact on our economy.”

At the same time, he warned that no deal would mean “very serious” consequences in the future for the economy, jobs and prosperity.

EARLIER : EU, UK Negotiators Agree On Text Outlining post-Brexit Relations

The political declaration on the relationship between the UK and EU after Brexit “agreed in principle”, the European Council says. British and EU negotiators have agreed on a joint text outlining their goals for the future relationship after Brexit, European Council President Donald Tusk announced on Thursday.

The document now needs the political approval of the British government and the remaining 27 EU member states, who are holding a special Brexit summit in Brussels on Sunday.

“I have just sent to EU27 a draft political declaration on the future relationship between EU and UK. The commission president has informed me that it has been agreed at negotiators’ level and agreed in principle at political level, subject to the endorsement of the leaders,” Tusk wrote on Twitter.

The joint political declaration goes hand in hand with the withdrawal agreement, detailing Britain’s divorce terms. It covers joint future ambitions in areas covering trade, security and political cooperation, laying the groundwork for negotiations that can begin as soon as Britain has left the EU.

Officials described the future partnership as “ambitious, broad, deep and flexible.”

German Chancellor Angela Merkel cautioned, however, that there was still a lot of discussion to be had before the final withdrawal agreement was settled.

“I will do anything to support reaching an agreement,” Merkel said at a business summit in Berlin, with the caveat that “a disorderly exit would be the worst possible way both for the economy and the mental basis of our future relationship.”

“We have come a long way, but it will certainly still require a lot of discussion, especially within Britain,” she added.

Many observers have said it is unlikely the British Parliament will vote in favor of the Brexit 585-page deal British Prime Minister Theresa May presented last week leaving open the question of how a no-deal Brexit would affect both the UK and the EU. May will make a speech to Parliament later on Thursday.

May is also set to be with Austrian Chancellor Sebastian Kurz in London. Austria currently holds the rotating EU presidency, and Kurz said that his visit is meant to help the Prime Minister bolster support for her deal and get a realistic idea of how strong support for it is.

Why The Opposition To Brexit Is So Strong

The most important point about the draft Brexit withdrawal agreement is that, once it is ratified, the United Kingdom will have no legal route out of it unless the EU agrees to let the UK out and replace it with another agreement. This makes it unique among trade treaties (including the EU’s), which always contain clauses allowing each party to withdraw on notice. Politicians who claim that this is just a bad treaty — one we can get out of later — are being ignorant or disingenuous.

Halfway through the 585-page document,  Art. 185 states a Northern Ireland Protocol ‘shall apply as from the end of the transition period’. Once the Protocol is in force, the UK cannot leave it except by ‘joint’ decision of the UK and the EU. This gives the EU a right of veto over the UK’s exit. In agreeing to this clause, the government has caved in over seeking a right to leave.

Indeed, the Protocol — which has become known as the ‘backstop’ — locks the whole UK into a customs union with the EU with no decision-making power. Annex 2 Art. 3(4) states that the UK shall be ‘informed’ of any decision by the EU to amend the Common Customs Tariff ‘in sufficient time for it to align itself with that decision’.

The EU has a huge (£95 billion) surplus in goods trade with the UK. This customs union gives the EU tariff-free access for its export goods into the UK market. It also forces the UK to maintain the EU’s high tariffs against competing goods from other countries. As one might expect, this is more advantageous to EU exporters than the UK. It prevents the UK from lowering tariffs if it wants to in order to benefit it’s consumers. More importantly, it reduces the possibility of the UK forging trade deals with fast-growing economies around the world. They are not going to give the UK free trade in it’s services exports if it can’t offer concessions in return on their goods exports to the UK.

And since the EU can just sit back and force the UK into these terms by default, why on earth should it give the UK a better offer — namely the long-term trade deal that the government is banking on?

The government has negotiated a ‘political’ (i.e. not legally binding) declaration about the future relationship. This has the barest outline of possible terms. Only three pages deal with trade. These talk of zero tariffs between the EU and UK, but notably omit any commitment by the EU that the deal would allow the UK to set its own external tariffs, as in a Canada-style Free Trade Agreement, or even under the Prime Minister’s Chequers dual tariff customs plan — which she has repeatedly claimed would allow the UK to conduct an independent trade policy.

On the contrary, the declaration states that there will be ‘customs arrangements that build on the single customs territory provided for in the Withdrawal Agreement’. This means that the EU will not be under a legal obligation to agree a trade deal which allows the UK to conduct its own future independent trade policy.

Art. 184 says that the EU and the UK shall use their ‘best endeavours’ to negotiate a trade agreement in time for the end of the transition. The Conservative party chairman claims that this is ‘a high legal bar’ for the EU. But an obligation to try to agree is completely non-justiciable: you cannot pin the blame on either party if each pursues its own interests and a deal is not reached.

So the EU can easily slow down the negotiations — or just not agree to the kind of deal the UK wants. The UK will then be forced into the so-called backstop. Not only would this mean a customs union and onerous ‘level-playing-field’ obligations binding the whole UK, but also the annexation of Northern Ireland into the EU for laws relating to goods, customs procedures and taxes. The list of EU laws which will continue to apply runs to 68 pages alone — and that’s just the titles. Neither the UK Parliament nor the Northern Ireland Assembly would have any say over these laws or over changes to them by the EU in future.

The ‘transition’ period would see most EU laws continuing to apply in the UK, enforced as now by the Commission and adjudicated by the ECJ. The difference will be that under Art. 7 the UK is excluded from ‘the nomination, appointment or election of members of the institutions, bodies, offices and agencies of the Union, as well as the participation in the decision-making and the attendance in the meetings of the institutions’. The UK we will be required to abide by laws which it has no vote in shaping. There are no legally effective safeguards in the Agreement against the EU making changes to its laws which actively damage vital UK industries such as financial services.

The transition period was supposed to end in 2020, but the Prime Minister now envisages extending it to 2022. Art. 132 actually says that it can be extended up to ‘31 December 20XX’. The likely extension of the transition coupled with the very thin political declaration means that it could run indefinitely, prolonging the turmoil of the past 18 months and uncertainty about the future. During all this time the UK would be bound by EU law; it’s fishing industry subject to EU boats in our waters and quotas and rules imposed by Brussels.

The second big legal point about this draft treaty is that the European Court of Justice, whose influence Brexit was supposed to end, is given wide-ranging jurisdiction over the UK, not just during the ‘transition’ but afterwards as well. Once the UK leaves the EU, the ECJ will cease to be a multi-national court in which the UK is a participating member and will become an entirely foreign court. So why should the ECJ’s writ still run? Sovereign states generally never agree to be bound by the courts of the other treaty party. This is dictated by legal protocol and common sense. Even the agreements between the EU and the tiny landlocked states of Andorra and San Marino contain conventional bilateral arbitration clauses.

But not this agreement. A supposedly neutral ‘arbitration panel’ has been set up to decide general disputes between the UK and EU. But under Art. 175, disputed questions of EU law will be decided not by the panel but by the ECJ — and the panel will be bound by the ECJ’s ruling. So the ‘independent’ panel will simply act as a postbox for sending the dispute to the ECJ. And as a rubber stamp when the answer comes back.

This draft agreement  locks the UK down by throwing away in advance it’s two strongest negotiation cards: EU budget payments of £39 billion and the future access to our market for EU goods.

At present, the EU treaties give the UK the right to withdraw on two years’ notice — a right it is currently exercising. But this new deal would lock the UK in with no right to leave at all, and negate any benefits of the freedom of action which Brexit should bring.

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Samuel Abasi

Samuel Abasi

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